The accommodation effects of the RWC

This came out yesterday via TVNZ. Apparently the October month was not kind to the accommodation sector, even with the RWC. A quick glance at the article reveals that while international guest nights in October 2011 (when compared to the same month in 2010) rose 7.1%, domestic guest nights fell by 6.5%, leading to an overall fall in guest nights of 1.5%. I wondered whether this was a blip or part of a recurring theme - so I dug a bit deeper.

I took the liberty of taking a closer look at the data from Infoshare and did the same calculations for several periods. What I found was rather interesting. From a national perspective, I calculated the year on year percentage change in guest nights for domestic, international and combined. For the March-August 2011 period, the national change in guest nights was -0.39% when compared to the same period in 2010. The domestic guest nights for this period in 2011 were up by 6.25% on the same period in 2010 while the international guest nights were down by 9.75%.

I wondered if the aggregated March-August period results were influenced by the March month results (when the immediate effect of the Christchurch earthquakes), so I separated out the year on year percentage changes. These were the outcomes:
March: Total guest nights: -5.44%; Domestic guest nights: 1.65%; International guest nights: -13.1%
April: Total: -3.76%; Domestic: 0.41%; International: -9.91%
May: Total: 0.90%; Domestic: 6.41%; International: -7.54%
June: Total: 0.29%; Domestic: 3.83%; International: -6.25%
July: Total: 1.99%; Domestic: 8.55%; International: -8.86%
August: Total: 8.4%; Domestic: 14.39%; International: -1.01%

It is clear that the March and April months are influential in the aggregated period - the other months had increases in total guest nights. What is interesting about these monthly figures is how the change in domestic guest nights was positive and growing in July/August, suggesting a time-shifting effect is occuring when compared to the October figures. It appears that domestic travellers decided that they should do their travelling before the RWC rather than during it. Without question the school holidays being shifted to accommodate the timing of the RWC will have contributed to this effect. Also of note is the negative change in international guest nights for all six months - although there was a marked improvement in August. The negative year on year percentage changes in international visitor nights seen above actually began in September 2010.

The September 2011 period saw a small increase from 2010, with the change in total guest nights an increase of 0.23 percent. International guest nights were up by 20.72%, although this was almost offset by a fall in domestic guest nights by 11.8%.

When the RWC months of September and October are aggregated and compared with the same period in 2010, overall guest nights were down by 0.69%, with the 13.45% increase in international guest nights being more than offset by the 9.03% fall in domestic guest nights. It would appear that the overseas visitors did come for the RWC, but locals decided to travel before the influx of international visitors, resulting in a dampened effect on the accommodation sector (and. most likely, on the net economic impact of the tournament) during the RWC period.

A quick look at the total guest nights for regions for the RWC period reveals that each region experienced:

• Northland: a fall of 2.53% compared to an increase in the March-August period of 2.62%;

• Auckland: a smaller increase (12.5%) compared to the March-August period of 14.06%;

• Waikato: an increase (6.32%) compared to the March-August period of 5.05%;

• Bay of Plenty: a fall of 1.58% compared to an increase in the March-August period of 4.13%;

• Hawkes Bay and Gisborne: an increase (9.47%) compared to a fall during the March-August period of -5.51%;

• Taranaki, Manawatu and Wanganui: an increase (0.36%) compared to the March-August period of 0%;

• Wellington: a smaller increase (6.5%) compared to the March-August period of 13.48%;

• Nelson, Marlborough and Tasman: an increase (7.35%) compared to the March-August period of 5.17%;

• Canterbury: a smaller fall, (-25.1%) compared to the March-August period fall of -26.06%;

• West Coast: a larger fall, (-9.87%) compared to the March-August period fall of -7.29%;

• Otago: a smaller fall, (-1.3%) compared to the March-August period fall of -2.66%; and

• Southland: a smaller fall, (-2.04%) compared to the March-August period fall of -8.09%.

Only four of the twelve regions experienced an increase in guest nights during the RWC period that bettered change in the six months leading up to the tournament. 

It will be particularly interesting to see what happens to these figures in the November and December months.

RWC and Tourism - more thoughts

In my last post a couple of weeks ago I looked briefly at the October month effect of the RWC in comparison to the previous October months. By way of a recap, where the average net (total) passenger arrivals in the October month between 2000 and 2010 was a shade under 54,000, in 2011 the corresponding figure was -4,337. In the September month (when the pool phase of the tournament was held across the country), the average net passenger arrivals between 2000 and 2011 was approximately 2,917. The corresponding figure in September 2011 was 51,174. In comparison with the average figures, it would appear that while the RWC is likely to have boosted September month net arrivals by some 48,000 visitors, the effect in October was actually a worsening of some 58,000 visitors. The combined effect of the RWC in the two months in question suggests a net outflow of some 10,000 visitors when compared to the averages for those months.

It would appear that the 133,200 visitors that arrived in the country for the RWC were offset by rather substantial crowding out. The effect of their spending on the economy will be dependent on whether the amount spent by the RWC visitors outweighed the loss of spending from those who left. Either way, it doesn't seem very likely that it will be $400 million, let alone $700 million. More will unfold in the coming months, I am sure.